U.S. natgas futures at 18-mth high near $4/mmBtu ahead of EIAs
* Front month hits highest level since September 2011 * Nuclear outages still running above normal * Cold weather remains on tap in long-term outlooks * Coming Up: EIA natgas storage data on Thursday By Eileen Houlihan NEW YORK, March 21 (Reuters) - U.S. natural gas futures rose to their highest mark in 18 months early Thursday, boosted to just under $4 per million British thermal units by continued cold weather and expectations for a fifth straight supportive weekly storage withdrawal. Lingering cold in consuming regions of the nation, a string of supportive storage withdrawals and above-normal nuclear power plant outages have combined to lift nearby gas futures by about 28 percent in just over a month. Traders and analysts expect weekly data from the U.S. Energy Information Administration to show a draw of about 70 billion cubic feet when figures are released at 10:30 a.m. EDT (1430 GMT), a Reuters poll showed. That would be supportive compared with a flat year-ago week and a five-year average draw of 26 bcf for that week. The contract broke through several key resistance levels on its run up from a five-week low of $3.125 per mmBtu hit in mid-February, and was accompanied by steady gains in open interest, a bullish sign indicating that new buying and not short covering has been fueling the upside. But some chart traders said the contract was overbought and due for a pullback with winter winding down soon and the 14-day relative strength index climbing into the high-80s this week, its highest in several years according to Reuters data. As of 9:28 a.m. EDT (1328 GMT), front-month April natural gas futures on the New York Mercantile Exchange were at $3.986 per mmBtu, up 2.6 cents, or less than 1 percent, after trading as high as $3.992, the highest mark for a spot contract since September 2011. Forecaster MDA Weather Services called for below, much-below or strong-below normal readings for nearly the entire nation except parts of the South in its one- to five-day outlook. The latest National Weather Service six- to 10-day forecast issued on Wednesday again called for below- or much-below-normal temperatures for a little more than the eastern half of the nation and along the West Coast, with some normal readings in other parts of the West. Nuclear outages totaled 22,600 megawatts, or 22 percent of U.S. capacity, up from 21,700 MW out on Wednesday, 21,600 MW out a year ago and a five-year average outage rate of about 18,100 MW. ANOTHER ABOVE-AVERAGE STORAGE DRAW EIA data last week showed storage fell 145 bcf the prior week, above Reuters poll expectations for a 134 bcf draw, the year-ago drop of 66 bcf, and the five-year average decline for that week of 74 bcf. The data showed domestic gas inventories are now at 1.938 trillion cubic feet, nearly 19 percent below last year's record high levels for this time of year, but about 11 percent above the five-year average level. The strong withdrawals have prompted analysts to sharply lower estimates for end-winter storage, with some expecting inventories to drop as low as 1.8 tcf, or about 4 percent above average. A Reuters poll in mid-January showed most analysts had expected stocks to finish the heating season at about 2 tcf. Baker Hughes data last week showed the gas-directed drilling rig count rose by 24, the largest number in over three years, lifted from the prior week's 14-year low to 431. But while the EIA last week lowered its growth forecast for 2013, it still expects marketed gas production to hit a record high for the third straight year.
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